License suspensions could be costing Ohio a big chunk of its workforce

An earlier version of this story incorrectly stated that both authors were researchers at the Federal Reserve Bank of Cleveland. Brian Mikelbank is with Cleveland State University. This story has been updated.

Suspending Ohioans’ drivers’ licenses over debts doesn’t just hurt those people. It also is likely taking a huge bite out of the state’s workforce, according to a study released last week by the Federal Reserve Bank of Cleveland.

According to the report’s more conservative estimate, a whopping 14.4% of the Ohio labor force could be at risk of leaving it in any given year due to such suspensions. That’s a big enough chunk to affect everybody, authors Kyle D. Fee and Brian A. Mikelbank wrote.

“Our analysis suggests that these suspensions, especially when combined with increasing driver’s license requirements, make finding and maintaining employment more difficult for a sizable portion of Ohioans, but that instability also affects the broader economy,” they wrote. “Fewer people in the labor force means fewer people to hire and fewer people to produce and consume goods and services.”

A huge number of Ohioans — more than 1.7 million in the average year — have suspended drivers’ licenses. And 60% of those aren’t suspended due to bad driving; they’re suspended due to debts, the Legal Aid Society of Cleveland found in a 2022 study.

Many of the debts are due to fines and fees related to driving. But some of the debts are wholly unrelated to driving — deriving instead from child-support delinquencies or court judgments.

The 2022 study found that nearly half of those with suspended licenses had more than one suspension and that 75% had been suspended for a year or more. Both of those facts strongly suggest people are having a hard time paying compounding fines and fees.

Not surprisingly, the suspensions fall disproportionately on poor communities and communities of color. So the suspensions have negative implications for their voting rights after the Ohio General Assembly last year passed a strict voter ID law last year — supposedly to combat voter fraud, which is nearly nonexistent.

According to the latest analysis, rampant license suspensions are likely bogging down the entire state economy as well.

The researchers looked at data from the Ohio BMV, the Bureau of Labor Statistics, and the Census Bureau to get an idea of how many jobs were threatened by debt-related suspensions and where the affected workers were. But in doing so, they had to contend with some uncertainties.

“At the most basic level, for those receiving a (debt-related license suspension), we do not know if they were employed, if they were looking for work, how likely they were to disregard the suspension and keep driving, if they could get to work without driving, and the length of suspension,” the authors wrote.

So they came up with a few scenarios. Under the more conservative one, they assumed that half of Ohioans with debt-related suspensions — about 830,000 — would comply with their suspensions and risk leaving a state labor force that in 2020 numbered 5.75 million.

That would be 14.4% of the state’s workforce leaving their jobs and thus unlikely able to do much about the debts that were the reason they lost their licenses in the first place.

“Based upon these numbers, there are potentially significant labor force impacts if only half of those receiving a DRS comply with the suspension,” the report said in a likely understatement.

When the researchers looked at the zip codes where the likely job losses would take place, the most severe were in urban areas. But they were also elevated in suburbs, exurbs, and across rural stretches of southern Ohio.

The problem has been getting worse in Ohio and is likely to continue to because of the number of jobs that require a driver’s license. A survey of job postings found that in 2015, a greater percentage in Ohio required licenses than nationally — 8% vs. a little over 6%. But by 2022 many more Ohio jobs were requiring licenses and the gap had grown much wider — 14% vs. just over 10%.

Unfortunately, those most likely to have licenses suspended due to debt are the ones most likely to have jobs requiring them. 

The report said, “employer driver’s license requirements tend to be highest in middle and lower-wage occupations, indicating the importance of a driver’s license to this segment of the workforce while highlighting how a lack of driver’s license can be a barrier to economic mobility for those most at risk of receiving a (debt-related suspension).”